Blockchain: Life on the Ledger

I created this video as a follow up to the one I prepared last year on Social Impact Bonds. It is time to examine the ways in which Blockchain could interface with social impact investing to further concentrate power and wealth and exacerbate long-standing forms of global oppression under the guise of philanthropy. This narrative flips the prevailing sales pitch for Blockchain on its head and offers a strong critique of a technology many consider a powerful disruptive force.

With decentralized identity we are cuing up permanent records for the masses with potentially disastrous consequences. Is it prudent to place our “trust” in a technology of unknown origin? No one knows who or what Santoshi Nakamoto actually is and whose interests this invention advances. Why would we be so naive as to remake the world’s social and economic structures around this code? What would it mean to live life on a ledger? This video provides glimpses into a potential future we should avoid at all costs.







Benevolent Biocapitalism? Um, no.

This piece expands on my previous post about IXO Foundation’s development of the Amply DApp, a proof of concept for a social impact token on Blockchain developed in South Africa’s preschools. It is an open source protocol designed to leverage Internet of Things monitoring to “prove” impact for those investing in the UN’s Sustainable Development Goals of which “equitable education” is number four.

Tracking “impact” is central to the deployment of predatory “social impact bonds” or “development impact bonds.” See the screenshot below describing use of benchmark testing to assess the efficacy of SIBs in the Indian education system. I think you can see similarities to the roll out of interim benchmark testing here in the United States.

Smart Impact Bonds UBS

In the fall of 2017, the Texas Education Agency brought on Andrew Hodge, an alumus of Teach for America and KIPP and who had previously worked for Deloitte and Salesforce, to be the state’s Director of Social Impact Bonds and Math Innovations Zones. I imagine we will see more SIB coordinator positions being created in other states very soon.

Andrew Hoge SIB TX

IXO has other proofs of concept coming online to track carbon off-sets using Internet of Things cookstoves. In the minds of the global impact investment community, there is not much difference between the management of toddlers and appliances. In the end it is simply about turning life processes into data that can be aggregated and manipulated to improve their bottom lines. Below are images from Nextleaf Analytics, showing one of these stoves and the device used to capture and analyze the data. To me it embodies digital colonialism, the lives of the poor managed through devices imposed upon them by wealthy, often foreign, interests (funder list here).

Stove Trace 1.jpg

Stovetrace 2

On a dying planet where wealth is concentrated in the hands of an elite few, the economic value of humanity, especially the humanity of black and brown people, will be less in the products they consume (because their purchasing power will have become so limited) than in the data they generate. Most of this data will come from interactions with interventions designed to “fix” them. And now with predictive analytics, algorithms can make pronouncements of “future” problematic behaviors well in advance, setting up device-wielding non-profit partners to continually enforce behavioral and psychic compliance with the structures designed to oppress and contain them. The legacy of colonization and white supremacy will continue in digital form, magnified through the actions of social impact investors.

The data that defines the lives of the global poor will be gathered through Internet of Things connected devices: smart phones, apps, and wearable technologies. They will be managed via their DIDs, decentralized digital identities. When accessing healthcare, education, housing or transportation, data points will be generated that shape the “risk” profiles of those receiving services in real time. The process of collecting and evaluating this data to prove “impact” will largely be automated with limited opportunity to appeal an algorithmic ruling. These interventions will be sold as necessary steps to save the planet. Meanwhile corporate foundations will “manage” the death spiral of climate change in such a way as to extract the very last drops of profit, all the while pretending they are benevolent actors.

The images below depict funding dashboards for a variety of projects related to the UN Sustainability Goals. Because these impacts are designed to be captured via apps, there is little nuance or humanity in the metrics or how they are analyzed.

IXO Donor Dashboard

IXO Water App

Below is a transcript (slightly edited for length) of a video interview with Anne Connelly, CEO of IXO Foundation, by Ameer Rosic, a self-described serial investor and Blockchain evangelist. Connelly previously worked with Doctors Without Borders in Africa and serves on the faculty of Singularity University in Silicon Valley. A native of Toronto, she earned an MBA from McMaster University with a certificate in Fin-Tech from MIT.

“Connelly: So, essentially our passion is helping solve some of the world’s grandest challenges, looking at issues like climate change and access to water and access to healthcare, a lot of the issues that the UN is trying to tackle through their Sustainable Development Goals. When we look at the problems that are tackling this space, one of the biggest ones is access to trusted data.

So when you’re looking at all these organizations, all these people around the world trying to solve these problems, they’re very much going into it blind. They don’t have information they need to make informed decisions about their work and to actually optimize their work. So, for us at IXO (Foundation) we’re creating a Blockchain-based protocol that enables organizations to make impact claims.

So you can claim that you taught a hundred kids or that you planted ten square kilometers of trees, whatever it is as long as it’s in the impact space. Then, that claim gets validated by an evaluator, either a human or a data source of some kind, and you have a validated impact claim that is essentially proof of impact, that what you say you’ve achieved has actually happened. This is really exciting, because the proof could open up access to social impact bonds, social impact investments, and a whole impact economy that we’ve never seen before. The data that is collected as a part of these claims becomes a part of an open data commons, a global impact ledger that organizations and researchers around the world can use to actually make the work they are doing more effective.

So, the main two issues are a lack of funding for sustainable development initiatives and then a lack of effectiveness of those initiatives. When you look at the sustainable development space there’s a lot of fraud, which I’m sure you’ve all seen it in the headlines and that kind of thing (“trust issues”).

For impact investors, for them to want to be switching from a traditional investment vehicle to the impact space, they have to have these evaluation mechanisms to prove that what they are investing in is legitimate, and the problem is that is very, very expensive. So one of the things that we’re tackling is how you can use data to drive down the cost of that evaluation and make impact investing a much more attractive investment vehicle for investors that are out there. So this is a massive market. I mean right now there is more than a trillion dollars that goes into the sustainable development space every year and if we can get more impact investment, it’s upwards of 25 trillion I’m looking at.

So we’re looking at it from a couple of different perspectives. We’re using data schemas to ensure the actual quality of the data is good. In terms of trying to determine whether the impact is quality or not, we leave that up to the users of the protocol. We’re very much an infrastructure operation, where if you as an organization say it’s good enough if someone says that they cleaned the beach and take a picture of it and that’s good for you then that’s great. For others they may want to have an IoT (Internet of Things) scale that connects the weight of all the garbage that was picked off the beach and you know subsequent levels of funding are given as a result. So we were really leave it up to the users who are building out on the protocol.

What you would be able to do would be to build out an application. So a really good example is actually the first one we built out called Amply. Amply is looking at the early childhood development space in South Africa. So, in South Africa preschool isn’t free. It costs a lot of money and most parents can’t afford it. So there’s incredible government subsidies for over 800,000 kids across the country, but in order for preschool teachers to actually access them they have to fill out attendance every day on paper and it’s an insanely inefficient process.

So what we’ve done is built out this application that allows them to take attendance through a mobile app. It’s very simple and very basic, but each attendance will essentially create an impact claim that a child was taught and down the road we hope these impact claims will enable them to access automatically these government subsidies. So the government knows their legitimate and it makes it a lot easier on the teachers. So we’re in 72 schools across the country, more than 55,000 attendance records taken so far. It’s very exciting.

We have a few exciting projects coming up in terms of proof of concepts on the protocol, but I can’t make any exciting announcements yet. But we’re looking very much at issues around climate change and one of the projects we’re very excited about is in the area of cook stoves. So, in the developing context will cook and heat their homes with fire, and this is bad from both an environmental perspective where they’re burning trees and cutting down forests, but also from a health perspective where they’re breathing in all of this particulate matter.

So there are a lot of projects out there that would provide with cook stoves, these little mini-stoves that they can use instead. That’s great. But say from the perspective of an impact investor who wants to know how many tons of carbon have I pulled out of the atmosphere because of these stoves, the only information they can really get is that the stove was delivered or that it wasn’t. And with applications like the IXO protocol what you can end up doing is say getting an IoT (Internet of Things) cook stove that can transmit data every time it’s being used, every time it’s turned on or off. Then the impact investors can know exactly how much carbon they’ve eliminated from the environment and they then have access to carbon credits and health credits as a result of this.

Rosic: So your major play is to try to evolve and integrate all these IoT with things…

Connelly: Yes, that’s the goal. We really want to try and take humans out of creation of the impact claims and evaluation of the claims as much as possible, and this is for a couple of reasons. First and foremost, it enables you to get a higher quality and a higher volume of data. We call it high-resolution data, and it also helps eliminate fraud in this process. And so as much as you can try to incorporate data into things, and it becomes a great feedback loop, too. Where you get this amount of data that can come back and help with the evaluation of future impact claims.

Rosic: But you also mentioned when you and I were talking in Mexico that it’s a massive market for impact bonds. I think they have been in the UK; I think they had them in Canada, but like you said it is very difficult to track. So let’s say the target at the beginning is looking for investors for impact bonds, or can a regular person say like my father or my mother over there participate in this network?

Connelly: Yeah, at the end of the day anyone can participate. We want this to be a real community effort in terms of trying to solve some of these sustainable development goals. Now in the early stages we do want to target impact bonds, because of their scale. You can get one set up and the amount of money and the amount of impact you can have as a result is enormous. But as I said, this is infrastructure. We want everyone to build out on it and we want everyone to try and tackle some of the challenges they are most passionate about, whatever those are.

…We’re working with a lot of partners to bring in their data sets, particularly in the early stages to build up the volume of data we have. So again looking at UNICEF, they have access to some data from Google and form Telefonica and a few other sources. So being able to leverage what we already have to make as effective decisions as we possibly can while we build up a much larger decentralized database is what we want to do.”

The image below is from an earlier post I did on digital identity. They REALLY do want to connect trillions of devices to billions to humans. Impact investors will DEMAND the trillions of dollars in economic value to which they feel entitled.

The proof of concept has arrived in the form of Amply.

Where do we go from here?

PTB Venture Capital Digital ID

Digital Colonialism: South Africa Puts Preschoolers on the Blockchain

With the debut of their Blockchain transcript, Southern New Hampshire University’s “College for America” and Learning Machine are in the vanguard of innovative digital credentialing for adults. At the other end of the “lifelong learning” spectrum, Trustlab’s IXO Foundation has staked out the early childhood space with a Blockchain DApp called Amply. Amply, an online attendance-taking system designed to track “impact,” is being piloted through SmartStart a South Africa pre-school franchise.

This proof of concept, financed in part through UNICEF’s innovation venture capital fund, had registered over 3,100 students across 85 centers as of spring 2018. Innovation Edge, a South Africa based social impact investment portfolio manager specializing in ed-tech, IoT health, and early childhood education, is another Amply funder. Remember Ready Nation’s Global Business Summit on Early Childhood? The one coming up in New York this November that I blogged about here? The one where early childhood educators and policy advocates were specifically EXCLUDED unless they came with a vetted group of four business people? Well, Cynthia McCaffrey, director of UNICEF’s office of global innovation will be speaking at that event, and Innovation Edge is listed as a sponsor.

While at first glance Amply may look like many other smartphone apps, there’s a lot going on beneath the surface. In South Africa the government reimburses preschool providers based on the number of children attending school each day. With Amply, providers take attendance digitally rather than on paper. Proponents of the app say the old-fashioned approach is inconvenient and lacks “trust.” The tone they use when talking about this lack of “trust” in the development aid space is steeped in a racist, colonial mindset. The “trust” issue provides cover for their real agenda. Pen and paper methods don’t capture enough data, and digitized data is what they most desire.

Unicef Trustlab SmartStart

A blog post from the Amply website describes the importance of the meta-data captured by the app, which ensures that the information collected on each child is both “high-fidelity” and trustworthy. In order for Amply to work, a Blockchain identity must be created for each child. Because all the data is tied back to an authenticated identity, “Valuable derivative data assets, such as risk scores, can be derived from this personal information, to benefit the individual and generate population-based data analysis to benefit ECD (early childhood development) programmes.”

Take a moment and re-read that last sentence. In South Africa they are using a school-based app to track, monitor, and generate risk scores for low-income black toddlers. Decentralised Digital Identity, which I wrote about here, is central to this enterprise. All of the data flows must be channeled into an individual’s Blockchain “ledger,” using a system of public keys.

The protocol uses something known as a “smart contract,” which is the translation of a legal contract into computer code that runs on the Ethereum Blockchain. This profile of Amply on github goes into detail about how it works. In short, the Amply app captures meta-data via the smartphone that verifies a claim that a particular child attended school on a given day. The fact that someone checks the box that they “attended” is sufficient “proof” for investors that said child was “educated.” Once an attendance claim is verified on Blockchain, an impact token is created. This token represents financial value for the provider and is transferred to the school’s online digital wallet where it can be exchanged for payment. Each school is also required to have a digital identity linked to their digital wallet. Analytics can be applied to the attendance transactions to assess the “impact” of pre-k services on the population being served and this data is used to evaluate returns for social impact investors.

IXO Foundation describes itself as an open-source development foundation working to create data infrastructure for the impact economy. The foundation employs Blockchain to generate digital assets from what they call “crypto-economic proof of impact.” This process is manifested when a Cape Town pre-k teacher scrolls through a student list, checks a box next to a child’s name, and in doing so generates value for those investing in education outcomes for poor children as defined by industry-determined metrics.

I first learned about IXO Foundation while watching the October 2017 World Bank Group-BTA (Blockchain Trust Accelerator) Summit, which was hosted in partnership with New America (see this link for New America’s funders, lots of tech and impact investors in the list). Shaun Conway, IXO’s president, was featured on a panel about using Blockchain for “social good.” Watch a clip of Conway speaking here.

Conway New America

IXO recently entered into a partnership with SocialSuite, a Melbourne, Australia-based enterprise that has worked in “evidence-based” program evaluation and is expanding into the area of smart contracts for social impact investments. SocialSuite was awarded $100,000 in seed funding from Salesforce Venture Capital this past March after they won a pitch competition. According to a company press release, CEO Brad Gurrie noted “Winning Salesforce PitchComp is another step in the momentum of the SocialSuite business. With the recent announcement of the IXO Foundation Partnership and winning Pitchcomp, there is significant interest from the industry on how SocialSuite can help non-profits, impact investors, and consultancies measure outcomes.” The company’s location is interesting given that Learning Machine is doing a Blockchain credential pilot in Melbourne, too.

A lengthy slide share describing the integration of IXO, Amply, and SocialSuite is viewable via this link.


SocialSuite 2

In closing, I invite you to watch this brief two-and-a-half minute video in which you see the world through the eyes of IXO. Imagine yourself transformed into an impact investor who sees the world a merely a sea of ones and zeros, data to be compiled onto a dashboard and managed for speculative profit.

“To count what matters, we need high-definition data with crypto-economic proof of impact.”

“The IXO protocol ensures impact claims are verified with intelligent evaluation oracles.”

“Verified data is a valuable digital asset that is minted as an impact token.”


Important follow up post here.


Edu-Blocks Arrive in New Hampshire

Roughly two months ago I discovered Southern New Hampshire University had become the first academic institution in North America to issue a diploma credential / education transcript on the Blockchain. It surprised me. I knew Learning Machine (MIT) was working on this in Malta, but I had no clue there was a domestic trial underway. I dove in, did a lot of research, and created the map below. To view an interactive version that is actually readable click here.

Blockchain Credentials

Then, after I was done I found myself mentally exhausted. I let it sit, but with summer winding down, it’s time to get back to it. There are many, many stories that can be told with this map, too many. I have a friend who tells me I tend to bury the lead and go in too many directions all at once. Honestly, I can’t disagree with her. I struggle with holding too much in my head and trying to put in down on paper in a way that makes sense. So, with that in mind, I’ll start with a short version and then, if you want to dive deeper into the map with me, keep reading.

The Short Version:

Blockchain, a ledger/permanent record of transactions that document our lives, is a concept we’re going to have to grapple with in the coming years.

There is now a proof of concept for a digital Blockchain wallet that will hold and allow instantaneous permissioned access to a person’s education credentials.

The test case for this technology involved an institution that is among the largest providers of online higher education in the United States.

SNHU’s test case focused on their “College for America” program, a competency-based model that eliminates seat time and face-to-face instruction. Gates and Lumina funded this model. It is one that maximizes profit for companies at the expense of the people providing the instruction.

“College for America” delivers a workforce-aligned curriculum. It favors “stackable credentials” and certificates over formal degree programs. It is closely linked to human capital development.

While Blockchain digital credentialing is starting in higher education, the Ed Reform 2.0 plan is to break down the walls between all levels of schooling. Sooner or later this credentialing will seep into K12 education. Remember micro-credentials and badges? Blockchain is perfect for them. Are you paying attention to developments like the Mastery Transcript Consortium? Blockchain is designed to hold that data, too. Badges are already being issued in K12 for after school, summer and Out of School Time programs. It won’t be long.

The people developing alternative credentialing come from the global fin-tech, social impact investment, and national security sectors.

Block-certs will pave the way for online learning lockers and digital portfolios. They will combine credentialing and digital payment platforms. They will usher in machine searchable credentials to facilitate the expansion of automated hiring (or non-hiring). They will also permit access to aggregated data to assess “impact” on pay for success outcomes-based contracts, while supposedly preserving individual “privacy.”

We have crossed a threshold, but as the new school year starts only a handful of people (other than the investors and those coding this new world) realize it.

We are not prepared, not by a long shot.

Paul Leblanc Blockchain

The Long Version:

Southern New Hampshire University is a private college in the southeastern corner of the state about an hour’s drive north of Boston, a nexus of digital technology, Third-Way public policy, and innovative finance development. The 3,000 people who attend classes on SNHU’s campus represent a fraction of the total enrollment. Under the leadership of Paul Leblanc, Senior Education Advisor to the merchant-banking firm Ridge-Lane, SNHU vastly expanded its virtual reach. Over the past fifteen years the school’s online enrollment grew to nearly 100,000 people. 2,700 faculty members spread across the country, most working part-time, deliver SNHU’s instruction.

In June 2018, SNHU became the first institution in North America to issue education transcripts on Blockchain. This was done in partnership with Learning Machine, an initiative spun out of the MIT Media Lab. An innovation hub at SNHU, the Sandbox Collaborative, has functioned as a space to facilitate discussions about the future of higher education at SNHU since 2015. Michele Weise left the Clayton Christensen’s Institute to run the space, moving on to Strada Education in 2017. She was replaced by Brian Fleming formerly of Tyton Partners, an investment banking and education strategy firm based in Boston. Below is a lecture given by Learning Machine’s CEO Chris Jagers on Blockchain delivered at the Sandbox Collaborative in February 2017.

Learning Machine worked in partnership with the MIT Media Lab to design an open standard to issue digital credentials called Block-certs.

Phillip Schmidt pushed the project forward at the MIT Media Lab. Schmidt helped launch Peer-to-Peer University, an online open education program with a deep list of funders that included Hewlett Packard, IMLS, the Knight Foundation, Dollar General, and the Siegel Family Foundation. P2P University grew out of a 2007 meeting hosted by Open Society and the Shuttleworth Foundation based in South Africa. The meeting resulted in the Cape Town Open Education Declaration that promoted the adoption of Open Education Resources and Internet based instruction across the globe.

P2P Founders

Interactive version of above map here.

David Siegel founder of the Siegel Family Foundation, one of P2Ps funders, is a co-founder of Two Sigma Investments and former Managing Director and Technology Advisor for Tudor Investments, Paul Tudor Jones’s (Robin Hood Foundation) company. John Overdeck, David’s partner at Two Sigma, has poured money into ed-tech, blended learning, SEL, and pay for success initiatives through his Overdeck Family Foundation.

Siegel : Overdeck Funding

Interactive version of above map click here.

Prior to his involvement with P2P University and the MIT Media Lab, Phillip Schmidt worked with United Nations University, Mozilla, and Accenture (involved in the ID2020 program).

It is notable that the Chicago Public Library, Creative Commons, MIT, and Mozilla were all collaborators on P2P University, since the MacArthur Foundations’s pilot LRNG badging initiative was launched in Chicago’s library system via the YouMedia and Chicago City of Learning programs. Mozilla worked closely with MacArthur to develop  digital badges. Badges laid the groundwork for the digital credentialing on Blockchain we now see emerging.

P2P Partners

Interactive version of above map here.

The first issuance of credentials on Blockchain took place at MIT in October 2015 in conjunction with the Lab’s 30th anniversary. All celebration attendees were awarded a digital certificate (badge). In 2016, certificates were issued on Blockchain for those who completed a boot camp and a workshop run by MIT. A challenge of the technology is that it requires people to use a combination of public and private keys to secure and verify certificate information. The average person doesn’t have that level of technical expertise, so Learning Machine devised a smart-phone app / e-wallet to make the process user-friendly.

Blockcert 2

Kim Hamilton Duffy, CTO at Learning Machine, was the architect for Block-certs. Duffy started out as a software engineer for Northrup Grumman, moved on to Microsoft, and then did stints in software engineering for Usermind and Visible Technologies, a company that provides real time analysis of social media content to the US intelligence community. In-Q-Tel, the venture capital arm of the CIA was an investor in that software. Chris Jagers, CEO, and Natalie Smoleski, business development, are Learning Machine’s other two staff members. Neither has extensive experience beyond running a company called Slideroom, which uses online portfolio software to inform education applications, proposals and hiring decisions.

Learning Machine entered into blockchain education credential pilots with the nation of Malta (fall 2017), the University of Melbourne in Australia (fall 2017), and the Bahamas (summer 2018) where funding support came from the Inter-American Development Bank.

Learning Machine Staff Funders

Interactive version of above map here.

The company has obtained financing from Learn Capital, Omidyar Network, and PTB Ventures. Learn Capital (Tom Vander Ark was a partner from 2008-2016 and now serves as an advisor) has extensive holdings in education technology, as does Omidyar. Omidyar Network also has considerable investments in social impact sectors involving digital identity and fin-tech. PTB stands for Project Trillion Billion and focuses on early stage investment at the intersection of digital identity and Internet of Things. David Fields, founder of PTB, went to school at the Booth School of Business University of Chicago (Richard Thaler), worked in venture capital and as an analyst with Citigroup, and serves on several boards of digital identity and encryption companies including Element and Callsign. Element is a biometric digital identity authentication company launched by Yann Lecun, former chief AI scientist for Facebook and founding director of the NYU Center for Data Science. Callsign is a digital authentication system that relies on analysis of biometric data, keystroke and swiping techniques, online habits and location data to provide secure acess.

Element Digital Identity

SNHU piloted its Blockchain transcript program with 1,200 students who graduated this summer from their competency-based, alternative education program “College for America.” College for America was launched in 2012 with money from the Gates Foundation channeled through an Educause Next Generation Learning Challenge Grant. The following year it became the first higher education competency-based education program approved to receive Title IV, Higher Education Act (HEA) funding. The program is one of 30 colleges and universities that are members of the Competency-Based Education Network (C-BEN), an initiative begun in 2014 and funded by Lumina to promote and scale competency-based diplomas nationwide.

Rather than obtaining a specific number of credit hours, SNHU students are expected to demonstrate competencies in 120 different areas. The program offers Associate of Arts and Bachelor of Arts degrees and certificates. The competency-based education courses are all online and aligned to the following industries: healthcare, insurance and financial services. SNHU has built partnerships for human resource development with companies including Aetna, SEIU, McDonald’s, YMCA, Scholastic, the Gap, Sodexho, ConAgra, K12, Comcast, and an array of state and municipal governments.

They’ve also partnered with Davinci Schools, a California-based charter organization funded by Gates and HP that promotes an online home-based and school based blended learning model. In 2016, Davinci and SNHU teamed up to craft a proposal for the Emerson Collective’s XQ Superschool competition. Their project, Rise High, was one of ten new school models awarded funding from Laurene Powell Jobs’s $100 million contest. The model targets foster youth in the Los Angeles area, offering “flexible access points” for wrap around services, a structure that is well suited to generating profit for the social impact investment sector and their non-profit partners.

The image below is from one of Leblanc’s 2014 slideshares introducing the self-paced CBE concept, viewable here.

College for America Slideshare

A blog post from College for America posted this week aims to inform HR professionals about the potential of Blockchain credentials. The benefits SNHU touts are portability; trust in the credential without verification (fraud prevention); and perhaps most notable, the potential for HR staff to utilize online searches of credentials to screen candidates. According to the post “Rather than reading each resume, HR will be able to find the most relevant candidates as easily as if they were typing a search into Google.”

In a previous post from April 2017 I describe a future where a person’s “resume” becomes a never-ending collection of skill codes, not unlike healthcare codes. To even qualify to apply for a job a person would have to have a minimum of ALL the required skills logged on Blockchain. If they didn’t, a program like College for America would offer them the opportunity to pay for an online class to earn the skills they lack. Of course there is no guarantee that after signing up for an online course, that person would complete it. Or that if they successfully completed it, they would end up getting the job. Meanwhile whatever debt the person took on to pay for the tuition continues to mount.

Google recently issued a $1 million grant to SNHU to develop “soft skills” assessments for “opportunity youth,” young people ages 16-24 who are not enrolled in school and are unemployed or underemployed. According to Google’s website, “SNHU will develop the Authentic Assessment Platform (AAP), a competency-based assessment mapped to in-demand soft skills. Results from this platform will feed into a facilitated job placement process to help inform a just-in-time training model for young jobseekers. SNHU will also address the lack of credentialing by providing those who complete this assessment with an SNHU badge.” According to this post on SNHU’s website funders are looking to develop an assessment that can identify such traits as grit, teamwork, and trustworthiness. If you’ve read my previous post, you’ll remember these are exactly the traits labor economists like Jim Heckman intend to document and manipulate in order to generate profits for social impact investors like JB Pritzker.

SNHU Google Grant

The school launched a massive advertising campaign and is vying with Western Governor’s University in Utah to unseat the University of Phoenix as the country’s largest online education provider. When I was in Boston earlier this spring, the entire interior surface of Boston’s North Station was branded with SNHU advertisements. Targeted growth areas include non-traditional students and DACA recipients. Leblanc has also initiated partnerships with community colleges and high schools in New Hampshire, Vermont, Massachusetts, Maine, Pennsylvania, and Utah, co-signing dual enrollment classes delivered by high school teachers when parents pay an associated $100 fee.

Sadly, another growth market is global refugees. In the fall of 2017 SNHU received an anonymous $10 million grant to scale their competency-based education program for the UN High Commission on Refugees, Connected Learning in Crisis, SOLVE at MIT and the American University of Beirut. Connected Learning in Crisis is comprised largely of Catholic-affiliated institutions. The program delivers instruction using a blended online model through their partner Kepler. Former DOE Secretary Arne Duncan is an advisor to the program. They are currently working with two sites in Rwanda and with the New Hampshire YMCA to deliver education services to refugees in the state.

Rwanda SNHU

College for America Refugee


Interactive version of the above map here.

Ed Reform 2.0 is veering away from traditional two-year and four-year degrees, replacing them with stackable credentials and badges that students (aka human capital) will be forced to acquire to compete for jobs in a shrinking labor market. To sustain this model SNHU needs to have a “trusted” system capable of logging “competencies” students acquire, since retention, always an issue in higher education, is especially challenging in the online education market. The ephemeral nature of gig economy employment will require continued re-skilling, what the reform/venture capitalist crowd attempts to euphemistically frame as “lifelong learning,” so the ledger or permanent record is key.

The cyber education model is suited to this period of extreme austerity and dehumanizing financialization. SNHU developed a product line that can be delivered 24/7 “anywhere,” “anytime.” The online classes, after a modest initial investment, can be repackaged and sold over and over to a wide range of clients yielding a significant rate of return.

Arizona State University has developed a similar initiative, EdPlus. ASU president Michael Crow, also an advisor to Ridge Lane, is advancing this program leveraging partnerships similar to those pursued by Leblanc. EdPlus has teamed up with corporations that rely on precarious employment like Starbucks, and is eyeing the refugee education market as well as dual-enrollment online courses for high schools. ASU was touted as a great model at the August 2018 “Imagine: A Better World, A Better Education Global Conference” hosted by Amazon Web Services in Seattle. Online education creates data, and data is the new oil. Data creates value for companies; data profiles people; and data is used to refine the AI many see eventually replacing human instruction.

ASU Rwanda

Matthew Pittinsky, CEO of Parchment, is on the faculty of ASU. He moderated a panel on Blockchain credentialing at the May 2017 ASU+GSV conference that is viewable below.

Parchment, founded in 2003, is a digital credentialing company financed in part with venture capital from Raine Group. Jeff Sine, Partner and Co-Founder of Raine Group with Joe Ravitch (son of Diane Ravitch) serves on Parchment’s board. Sine formerly worked for UBS, a Swiss bank that has been doing considerable R&D on blockchain identity and development impact bonds (like global SIBs). Raine Group led two rounds of funding for Parchment in 2012 and 2014. Details here and here. Pittinsky and ASU have not yet jumped into a Blockchain certification pilot, but with SNHU moving forward, I’m sure they have something waiting in the wings.

So, the days of “Learning Is Earning” have now arrived, perhaps earlier than anticipated. I see the NPE Conference is coming up in October, their fifth gathering. When the event came through my social feed, at first glance the line-up looked not much different than what it had been back in 2014. I’m not going to make it to Indianapolis, but for those of you who go, maybe ask Diane when Blockchain credentialing and impact investing are going to be put on the front burner. The clock is ticking and we need to strategize what our options are in this post-Janus moment.




“Social capital” scrip? Fin-tech experiments with new forms of precarious “employment.”

I write this piece as a follow up to my post on self sovereign identity on Blockchain, the distributed ledger system designed to capture flows of data about our lives. Supporters of Blockchain tout its ability to secure “transactions” into permanent, immutable records of activities, earnings, payments, and debt. As we shift to a cashless society dominated by dynamic online payment systems, I see new forms of draconian labor compensation practices starting to emerge.

To set the stage for my examination of Union Capital Boston, I want to give you a bit of personal background. I work at a botanic garden surrounded by a mostly post-industrial landscape. It’s on the way to the airport, a stone’s throw from trash transfer plants. Residents live with terrible air quality due to the refineries across the river. For a number of years we were hopeful they’d be shut down, but then fracking revitalized the petroleum industry and they’re still going strong.

When I started my job fifteen years ago, an adjacent parking lot held hundreds of school buses. Most students in Philadelphia don’t take yellow buses to school, but the company must have serviced the field trip market and perhaps charter schools and private schools. About seven years ago, as standardized testing ramped up and education funding decreased, the era of field trips drew to a close. The bus company closed up shop, and within a year or so that lot was taken over by a scrap metal company.

Today sidewalks outside the scrap yard are littered with wrecked cars. There’s a constant flow of people in pick up trucks, with shopping carts, and grocery dollies carrying in old appliances, rebar and junk to make ends meet. We are on a trajectory of intentional scarcity and economic instability that has been picking up speed as technology and financialization take hold of our lives. It’s brutal. The image of a frail elderly gentleman attempting to navigate a top-heavy shopping cart across the treacherous trolley tracks remains indelibly printed on my mind and my heart.

Jobs with pensions, with regular hours, with benefits, with stability have been slipping away for decades. First there was temp work and consulting, later gigs and now micro-work. Some try to cobble together part time jobs, but barbarous algorithms, striving for leaner deployment of human labor, make it nearly impossible to piece together a workable schedule. Meanwhile, tech has stepped up to design platforms that meet industry’s need for “just in time” labor.


mTurk matches developers and businesses with “human intelligence” at a “lower cost than was previously possible.” Discrete tasks like identifying objects in photos or transcribing audio recordings are a poor substitute for a regular job. Now we have Uber, Insta-cart shoppers, Task Rabbits who vie to assemble Ikea bookshelves at the lowest possible wage. While this work may be less dangerous than scrap collection or being driven to exhaustion or death in an Amazon warehouse, it is still not a viable option for anyone who desires a stable life and to raise a family. The Fourth Industrial Revolution isn’t even in full swing, but we’re pushing kids into “career connected” pathways even though we have no earthly idea what the future of “labor” will be other than that all signs indicate it won’t be good for most people.

Now I’d like to introduce you to Union Capital Boston, a new economic model that, were it ever to become widely adopted, would grossly undermine authentic, citizen-driven, grassroots community engagement. The non-profit organization based in Roxbury, MA was founded in 2014 by siblings Eric and Anna Leslie. The premise is that what the poor REALLY need is a system of rewards points that allow them to acquire small cash gift cards in exchange for volunteering in their communities. They also promote helping participants build resumes of volunteerism and activism, well-suited to being badged on Blockchain.

UCB Intro


The Leslie’s system isn’t on Blockhain, but it does have ties to the impact investment community, is located in greater Boston where all of this is being incubated, is promoting interventions tied to established behavioral economic “nudging” strategies, and seems to be an experiment in activity tracking and alternate payment systems using  “virtual bank accounts.” In a sense, it is creating digital scrip where “good citizenship” is structured and rewarded by corporate-driven philanthropic interests and their complicit non-profit partners, all imposed upon the poor under the guise of benevolence. Membership fees that participating non-profit groups pay to become members of the program underwrite the cash payouts.

Prior to obtaining his Masters in Public Policy from the Harvard Kennedy School of Government, Eric worked for nine years in education, first as a Teach for America Fellow and later as a teacher and school leader at KIPP charter schools in Philadelphia (note Jay Coen Gilbert, co-founder of B-Lab, the entity that establishes social impact metrics, serves on the KIPP Philadelphia board). Anna has a Masters in Public Health, worked as an outreach coordinator for Americorps (an initiative of the Corporation for National and Community Service along with the Pay for Success Social Innovation Fund), did a short stint at KIPP and then went on do to research at the Harvard School of Public Health.

Knight Union Capital

In 2015, the Knight Foundation granted Union Capital Boston $35,000 to “prototype a program and tools to reward citizens for getting civically involved, as part of an effort to accelerate and learn from early-stage media and information projects.” They received another $7,500 from the Boston Foundation. In 2016 they were granted $60,000 by Rockefeller Philanthropy Advisors, Inc. (Rockefeller, the force behind the Global Impact Investment Network).

The Knight Foundation is doing a lot of “civic” work in Philadelphia. I didn’t end up incorporating this plot line into my “Building Sanctuary” story, but in the back of my mind I had entertained the idea that all of these philanthropically-directed civic projects could be a means to identify possible change agents in advance and neutralize them. Maybe that’s too dark. I don’t know, but Knight is also funding Internet of Things grants for “smart” cities…

What Eric and Anna developed was an app and a system for earning “points” that could be exchanged monthly for cash gift cards in denominations from $25 to $200. Only certain activities earn points. They’ve had to scale back on compensation, so options that used to be rewarded are now just “celebrated.” See the image of the UCB Selfie guidelines below:

Union Capital Selfie Star

If you consider most activities are awarded 200 points, the per-hour rate of compensation is at most $2 (presuming the volunteer activity is only an hour) for the $25 gift card. The system is constructed so that the number of points needed to obtain a larger gift card is much, much higher. To receive a $200 gift card, a person must volunteer 750 hours, which equates to a payment of twenty-six CENTS per hour.

All of this activity, including geolocation data about the “volunteer,” is logged via the UCB app where it is aggregated in dashboards so communities can compete with one another for “civic engagement.” I’m sure all of this data will be associated with Rates of Return on Pay for Success contracting tied to education, healthcare, housing and financial inclusion. It is important to note that one of the activities rewarded is voter registration and participating in political activities.

Union Capital Boston Chart

Union Capital Politics

Note their funders below:

UCB Funders

I want to share an excerpt taken from Union Capital Boston’s Facebook page in March. It has since been removed. It describes the plight of a single mother who works full time in the Boston area, but cannot make ends meet due to the high cost of living and her low wages. How do to they proposes to solve her problem? With an app of course! With the help of UCB, this mother will spend whatever open hours she has outside of her work and family time “volunteering” to earn rewards so that she can buy a transit pass to get to work. Rather than addressing income inequality, which would be the radical solution, impact investors like the Leslies propose surveillance apps that proffer “assistance” with many, many strings attached. It is a solution that completely undermines the true spirit of community support and mutual aid. This “solution” is one structured around the financial motivations of impact-oriented non-profits and their investors.

Do I think Union Capital Boston is a program that is going to take off soon? No, I actually don’t. They have about a thousand members now. What I think is that this program is an incubator for bigger projects down the road. I wouldn’t be surprised if the policy folks at Harvard and the digital economy folks at MIT are getting regular updates from Eric and Anna. The end game with digital identity and payment systems is a bit farther out on the horizon. But global fin-tech needs these test cases, and they need to start normalizing new and ever more abusive alternate labor payment systems. They need to lay the groundwork for the successor to “micro-work.” It appears some are betting on “social capital scrip” being the next big thing, maybe with a side of Sesame Credit factored into dynamic pricing just to keep things interesting.

Excerpt pulled from the UCB Facebook Page March 2018:

“In every low-income community there are vast amounts of human and social capital, and wonderful organizations trying to utilize those resources to make improvements. These resources and organizations are often disorganized, disconnected, and inefficient. Union Capital Boston (UCB) aims to connect people with these resources in low-income communities and provide rewards in order to overcome the poverty trap.

“I’m stuck!” laments Nadia, who lives in the Boston neighborhood of Roxbury with her three children. Although she works full time, Nadia’s $28,000 annual salary is barely more than half of the median family income in Boston ($52,000), and more importantly, insufficient to meet the city’s high cost of living. Like many in her community, she does not want to depend on government assistance but has to use SNAP benefits and Section 8 housing to make ends meet.

By joining UCB, Nadia will earn points-tracked by swiping a QR code on her smartphone or keychain-for doing things that benefit bother her family and her community. For example, Nadia picks up her children from school on a Friday and earns 100 UCB points by volunteer at their afterschool program. On the way home, Nadia shops at the local grocery store and received 50 UCB points for her purchase. On Saturday, Nadia takes her children to the neighborhood playground and joins in a clean up earning another 100 UCB points. Nadia now has earned 250 points in her UCB Virtual Bank account. She logs into the UCB Virtual Store and uses her points to purchase a monthly MBTA pass that she needs to commute to work-all from giving back and being loyal to her community.

UCB plans to partner with schools, businesses, and civic groups that will benefit from increased participation and business. Ultimately, these institutions will pay fees to UCB in exchange for increased patronage from and improved outcomes for UCB members. UCB will use capital garnered from these fees to purchase and distribute rewards, including public transportation passes, health care coverage, home loan assistance, and college tuition payments.

The concept of customer rewards is not new, but the goal of organizing loyalty in a low-income community is a new endeavor that we believe will yield important benefits based on recent academic studies. According to research by Canada’s Knowledge Development Centre, key motivations for low-income volunteers like Nadia include desire for personal and professional development, and contribution to one’s community. Furthermore, Mark Rosenbaum in the Journal of Services Marketing (Vol. 19, Iss: 4, 2005) demonstrates that participation greatly increased when customer loyalty programs were communally-based, rather than just financially motivated, because individuals highly valued connecting with their community. Robert Putnam’s research demonstrates that this community loyalty improves social capital, which is a key component for breaking out of poverty. The benefit of a low-income community rewards program is therefore two-fold: create opportunities for individuals and families, while simultaneously improve the surrounding community.”

Below is a screen shot of their May 2018 community participation dashboard. The behavioral economists sure do love their leader boards. So much better to have people pitted against against one in competition than organizing together, eh?

UCB Dashboard



Blockchain, Self-Sovereign Identity, and Selling Off Humanity

It’s time activists began to develop a working knowledge of Blockchain and self-sovereign digital identity, because these are the mechanisms that will drive the transition to IoT monitoring for the purposes of Pay for Success deal evaluation. I created a slide share about Blockchain as part of a “Smart Cities” post I wrote last year, which can be accessed here if it helps to have visuals.


Blockchain Slideshare


The technology became public in 2008 when Santoshi Nakamoto published the whitepaper “Bitcoin: A Peer to Peer Electronic Cash System.” No one knows who Nakamoto actually is. Over the past decade Bitcoin digital currency has generated significant buzz, yet many believe Blockchain will be even more transformative, as big as or bigger than the rise of the Internet.

MIT is heavily involved in Blockchain research and development through its Digital Currency Initiative, housed within the MIT Media Lab. The program is led by Neha Nerula, formerly of Google who holds a PhD from MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL). Nerula served on the World Economic Forum’s Global Future Council on Blockchain from 2016-2017. Its faculty advisor, Simon Johnson, co-founded the Sloan School’s Global Entrepreneurship Lab and worked as chief economist for the International Monetary fund.

In an April 2018 article, “In Blockchain We Trust,” Michael Casey, global economics professor, goes into detail regarding the use of Blockchain to create “value” in virtual worlds by securing ownership of digital assets. As we kill off the planet and begin spending more and more time in online environments, there’s cold comfort knowing the forces of global monopoly capital are rapidly colonizing digital worlds, too.

Neha Nerula

Blockchain is the structure that underpins crypto-currencies like Bitcoin, but it’s much more than that. In its simplest terms, it’s a ledger that keeps track of transactions, all kinds of transactions that may or may not have a financial component. Unlike a dusty accounting ledger or its modern equivalent, something like Quick Books, data stored on Blockchain is distributed. This means multiple exact copies of the same encrypted data live on peer-to-peer networked computers, which supposedly makes it more secure. If one node goes down the information is not lost. It is portrayed as the ultimate “permanent record.”

Data stored on Blockchain is “verified” by computers that use a consensus process, competing to solve cryptographic puzzles in exchange for Bitcoin payments. This cryptographic authentication injects “trust” into transactions, enabling security without the need of a third party to ensure everyone is on the up and up. Once data is locked into Blockchain, promoters of the technology say it is immutable, unchangeable. Although, as with everything coded, there are still vulnerabilities and hacks as discussed in this MIT Technology Review article “How secure is blockchain really?”

It may be some indication of the level of actual “trust” developers have in blockchain that the Chamber of Digital Commerce and Coin Center created the Blockchain Alliance in the fall of 2015 to “pro-actively engage” with regulatory and law enforcement agencies. In the United States, government partners include: DEA, DHS, DOJ, FBI, US Marshal Service, US Secret Service, ICE/HSI, CBP, IRS-Criminal Investigation, FDA, US Postal Inspection, Commidity and Futures Trading Commission, SEC, FTC, FDIC, as well Attorney General’s Offices in California, Texas, New York, and Ulster County. Seems they have some rather powerful partners.


Blockchain Alliance Partners



Some Blockchains are public, others are private. Data stored on private chains can be made accessible using a combination of matched public and private “keys.” A public key is used to verify and encrypt data. It is public and can be known by anyone. A private key decrypts data that has been encrypted with its paired public key. These keys consist of extremely long sets of characters, which can be shortened to a public key fingerprint or associated with biometric information via a biocryptic process.

Digital currency payments validated with biometric information like iris scans have been prototyped using refugee populations over the past few years (see the featured image). While the technology that undergirds it is complex, programmers are developing accessible interfaces that make using digital currency as easy as opening an app and verifying a transaction, financial or otherwise, with a thumbprint or facial-recognition scan.

Refugee ID App Payment Biometric

Beyond their capacity to hold tokenized digital currencies, e-wallets are being used to hold all sorts of other information. They are touted as an effective means to manage the continuous flows of activity, money, and data that surround us. In the fall of 2016, the state of Illinois; home to many Pay for Success players including: James Heckman, JB Pritzker, Rahm Emmanuel, the MacArthur Foundation, and the Chicago Mercantile Exchange (trading financial and commodity derivatives), charged a Blockchain Taskforce with examining ways to use the technology to promote economic development in the state and “improve record keeping.” Their final report, issued in January, is available here. Below is a map of the players involved. Click here for the interactive version.

IL Blockchain Initiative

Included in the report is an info-graphic I have shared repeatedly. It depicts public welfare food benefits being put on Blockchain with “healthy” eating nudges built into the mechanics. Memorize this. Internalize it. This how they will deploy computer code to control the growing masses of the poor. See Carolyn Leith’s great post “Do you believe Universal Basic Income will save society? Think again.” Putting “friction” in the system is not limited to SNAP benefits. Similarly coded nudges could just as easily be inserted into “choice” options around education savings accounts, healthcare access, and housing vouchers. How about Sesame Credit? It’s not too much of a stretch to imagine citizen scoring being embedded into these systems as well.

Blockchain SNAP Nudge

In the fall of 2017, Illinois announced a partnership with Evernym, a Utah-based company that develops digital identity solutions. They plan to put birth certificates on Blockchain. Increasing attention is being paid to the field of self-sovereign identity. The premise, if you go along with it, is that you no longer need a centralized authority to recognize your identity. A person can simply build up a digital identity through recorded transactions stored on Blockchain. Un-housed people in major cities are being scooped up as test subjects.

Austin has undertaken such a program with financial support from Bloomberg “What Works Cities” Philanthropies. This population is also one that requires significant support, making them prime candidates for Pay for Success interventions. Of course the impact of the interventions must be able to be tracked and measured, because this is an investment market after all. Self-sovereign identity makes to possible to aggregate all of that data, streamlining deal assessment. Fummi is one app in development to support such programs.

Blockchain Austin App

Many “smart” cities are establishing municipal ID programs, touted as a “solution” for people unable to obtain state-issued identification. It sounds good, but I can’t help but wonder if the plan is to convert these programs to self-sovereign identity apps on Blockchain in the not too distant future. Oakland’s program links to a debit card, so there is precedent for tying these IDs into digital payment systems.

Last fall the city of Philadelphia issued a Request for Proposals for the development of a municipal ID program, though it appears to have since been cancelled. The RFP expressed a desire to incorporate tracking other public services, including library access and health records, onto the card. They also wanted to build in the ability to share data with private and non-profit partner organizations via magnetized strips. See screenshot below or read the full RFP here.

Philadelphia Municipal ID

This link from the Worldwide Web Consortium discusses use of DIDs or Decentralized Identifiers as key element of this new form of identity management. Of course there are downsides to efficient identity systems. During a panel at the Advanced Digital Identity Summit last fall around  timestamp 26:00, Bitcoin entrepreneur Andreas Atonopolous, cautioned the audience that digital identity systems could pose risks, especially for populations living under authoritarian regimes where governments may use digital methods to control how people interact with society.

Antonopolous described conversations he’d had in places like Argentina where people expressed serious reservations about these systems, because their government had a history of throwing dissidents out of aircraft. If private keys are tied to biometric markers, it should be expected that people will at some point be compelled by authorities to open access to their data-using force to attain a face or fingerprint scan against someone’s will. Or even if brute force were not used, to withhold access to needed services, until the person has no other choice but to submit.

Other pilot programs underway in Illinois include land titling in Cook County, academic credentialing at the University of Illinois, logging green energy task credits, and state licensing for healthcare providers. That last one is interesting; a toe in the water, perhaps, to begin shifting Medicaid onto Blockchain?

The day after I wrote “Minding our Health: Digital Nudge Part Two,” I discovered a 2016 whitepaper by Institute for the Future (creator of “Learning is Earning” and edu-blocks) “A Blockchain Profile for Medicaid Applicants and Recipients.” The paper pitches the idea of creating Blockchain smart contracts to devise “smart” health profiles that would allow AI-mediated sale of healthcare insurance and IoT monitoring of prescriptions and patient compliance. Pretty overwhelming if you consider that IFTF also imagines a future where AI assistants are going to help people navigate their lifelong-learning/human capital management plans.

Illinois Blockchain Pilots

I have a nagging fear we’re looking at a future where Universal Basic Income stipends proffer subsistence, just enough to keep the masses alive and compel them to sell their data for the most modest luxuries, maybe a chocolate bar. Platforms are being developed right now that encourage the widespread sale of personal data for the purposes of AI development. Access to data is granted using pseudonymous protocols that permit it to be queried without the initiator of the query knowing the actual identity of the person whose data is involved. Proponents of big-data government really want us to believe it’s ok to allow our personal data to be poured into massive data lakes as long as it remains anonymized. Check out Ocean Protocol, Enigma, and datum. I’d love to hear what you think.

Personally, I think they’re aiming to use our digital exhaust to build HAL.

Ocean Protocol Main Page




Minding Our Health: The Nudge, Part Two

This piece expands upon my prior post about digital nudging and behavioral economics. Disruption in the healthcare industry mirrors the ed-tech takeover that is well underway in public education. If you explore the webpage for Catalyst, the innovation PR outlet for the New England Journal of Medicine (remember, social impact policy makers and many investors are based in Boston), you’ll notice the language being used to direct health care providers towards big-data, tech-centered solutions is eerily similar to the language being used on educators and school administrators.

The FCC’s “Connecting America: The National Broadband Plan” of 2010 outlined seven “national purposes” for broadband expansion. Healthcare and education were the first two topics covered in that report. Both chapters focus on “unlocking the value of data.” Who will the big winners be as we further digitize our lives? My assessment is the telecommunications industry and national security/police state will come out on top. Locally, Comcast and Verizon are key players with interests in both sectors.

Education and healthcare fall under the purview of Lamar Alexander’s Senate HELP (health, education, labor and pensions) Committee, so the similarities in tactics shouldn’t come as a surprise. In researching the $100 million federal Social Impact Partnerships Pay for Results Act (SIPPRA) launch I attended in Washington, DC last month, I noticed one of the Republican Senators who presented, Todd Young of Indiana, had attended the Booth School of Business MBA program at the University of Chicago. Recent Nobel Prize winner in behavioral economics Richard Thaler teaches there, and I was curious to see if Thaler’s thinking had influenced Young. Interactive version of Young’s map here.

Todd Young Map

I located C-SPAN coverage of a Senate hearing on healthy lifestyle choices, which Young participated in on October 19, 2017 (transcript follows). Lamar Alexander and ranking member Patty Murray, who inserted Pay for Success provisions into ESSA, chaired that hearing. Behavioral economics was discussed extensively. Young’s remarks start at timestamp 34:00.

The topic of the hearing was reducing healthcare expenditures on chronic illness, which they claimed would amount of hundreds of billions of dollars in “savings.” Given the amount of money on the table, it seems clear this sector is ripe for outsourced, outcomes-based contracts that will deploy emerging technologies like health care wearables. Six measures of good health were identified during testimony: blood pressure, cholesterol level, body mass index, blood sugar, smoking status and either the ability to meet the physical requirements of your job (or on this one the Cleveland Clinic person said unmanaged stress.)

The claim was that if an insured person met four of the six measures, saw a doctor regularly, and had their vaccinations up to date they would avoid chronic illness 80% of the time. Of course the conversation was entirely structured around individual “choice” rather than economic and racial systems that make it difficult for people to maintain a healthy lifestyle.

This neoliberal approach presumes people have free time for regular exercise, not considering they may be cobbling together several gigs to make ends meet. It presumes the availability of healthy food choices, when many black and brown communities are food deserts with limited access to fresh produce. It presumes the stress in people’s lives can be managed through medicalized interventions and does not address root causes of stress in communities steeped in trauma. It presumes ready access to a primary care physician in one’s community.

It is a gross simplification to push responsibility for chronic health conditions solely onto the individual, giving a free pass to social systems designed to harm large subsets of our communities. By adopting a data-driven approach to health outcomes, as would seem to be the case with the above six measures (check a box health), the federal government and health care systems appear to be setting health care consumers up to become vehicles for data generation in ways that are very much like what is happening to public education students forced to access instruction via digital devices. Imagine standards-based grading, but with health measures.

The people who provided testimony at the October 19 hearing included Steve Byrd, former CEO of Safeway, now at Byrd Health; Michael Roizen of the Cleveland Clinic; David Asch Director of the Wharton School’s Center for Health Care Innovation; and Jennifer Mathis of the Baselon Center for Mental Health Law and representing the Consortium for Citizens with Disabilities. Mathis was the only one who testified strongly on behalf of the rights of the insured to withhold personal information and was very concerned about the discriminatory nature of incentivized medical insurance programs, particular with regards to people with disabilities.

In his testimony, David Asch, director of the Center for Healthcare Innovation based in the University of Pennsylvania’s Wharton Business School, described effective designs for health incentive programs, noting that concerns about losing money were more effective from the insurer’s point of view that interest in receiving financial rewards. For that reason Asch said taking away money from someone should be considered before offering a reward. Asch also noted that effective programs included emotional engagement, frequent rewards (tweaked to people’s psychological foibles to they didn’t have to be too large), contests and social norming, including the use of public leader boards.

Nudge Units Health Care

The date of the hearing is interesting, because right around the same time, public employees (including the teachers) of West Virginia were facing dramatic changes to their insurance plans. These changes included compulsory participation in Go365 an app-based health incentive program that imposed completion of intrusive surveys, wearing a fit bit (if you didn’t there was a $25 fee imposed each month), and meeting a certain step count per day. I include a transcription of testimony from one of these teachers, Brandon Wolford, given at this spring’s Labor Notes conference at the end of this post.

The incorporation of mHealth (mobile health) technologies is a key element of the healthcare disruption process. Increasingly, wearable technologies will transmit real-time data, surveilling the bodies of the insured. mHealth solutions are being built into healthcare protocols, so private investors will be able to track which treatments offer “high-value care.” The use of wearables and health apps also permits corporate health systems to insert digital “nudges” derived from calculated behavioral economic design, into the care provided, and monitor which patients comply, and which do not.

Mobile Health CHIBE

At the moment, the tech industry is working intently to integrate Blockchain technology and Internet of Things sensors like fit bits and health apps on smartphones. Many anticipate Blockchain will become a tool for securing IoT transmissions, enabling the creation of comprehensive and supposedly immutable health data logs, which could be key to mHealth expansion. Last summer the Medical Society of Delaware, a state that touts itself as a Blockchain innovator, announced a partnership with Symbiont, to develop healthcare records on Blockchain. Symbiont’s website claims it is the “market-leading smart contracts platform for institutional applications of Blockchain technology.” The company’s initial seed round of funding took place in 2014 with a second round raising an additional $15 million in May 2017 according to their Crunchbase profile.


The July/August 2018 issue of the Pennsylvania Gazette, the alumni magazine for the University of Pennsylvania, features Blockchain as its cover story, “Blockchain Fever.” The extensive article outlines use cases being considered for Blockchain deployment, including plans by a recent Wharton graduate to develop an application that would certify interactions between healthcare agencies and Medicare/Medicaid recipients for reimbursement. The University of Pennsylvania Health System is deep into innovative technologies. David Asch, director of Penn’s Center for Health Innovation, testified at the October 2017 hearing. The Penn Medicine integrated health system was created in 2001 by former UPenn president Judith Rodin in collaboration with Comcast Executive David Cohen. Rodin went on to head the Rockefeller Foundation, and in the years that followed the foundation spearheaded the creation of the Global Impact Investment Network. GIIN fostered growth of the social impact investing sector, at the same time healthcare began to transition away from a pay-for-service reimbursement towards a value-based model predicated on outcomes met.

Below is a relationship map showing the University of Pennsylvania’s involvement in “innovative” healthcare delivery, which I believe stems from Rodin and Cohen’s connections to Comcast. It is important to note that the Center for Health Innovations claims to have the first “nudge unit” embedded within a health system. Asch is an employee of Wharton, and Wharton is leading initiatives in people analytics, behavior change via tech, and Blockchain technologies. Interactive version of the map here.

UPenn Health Innovation GIIN.jpg

New types of employer-based health insurance systems have started to emerge over the past six months. Based on this New York Times article, it seems employees of Amazon, JPMorgan and Berkshire Hathaway will have a front row seat as these technological manipulations unfold. Last fall Sidewalk Labs, the “smart cities” initiative of Alphabet (parent company of Google), announced an expansion into managed healthcare. City Block (read Blockchain) will tackle “urban health” and populations with “complex health needs.”


Reading between the lines, it appears Alphabet aims to use poor black and brown communities that have experienced generations of trauma as profit centers. Structural racism has created a massive build up of negative health outcomes over generations. Now, with innovative financial and technological infrastructures being rapidly put into place, these communities are highly vulnerable. Ever wonder why ACES (Adverse Childhood Experiences) has scores? I expect those numbers are about to be fed into predictive profiles guiding social investment impact metrics.

How convenient that the “smart city” solutions Sidewalk Labs is likely to promote will come with IoT sensors embedded in public spaces. How convenient that healthcare accelerators are developing emerging technologies to track patient compliance down to IoT enabled pill bottle caps; sensors that allow corporate and government interests to track a person’s actions with precision, while assessing their health metrics in excruciatingly profitable detail. Technology platforms are central to City Block’s healthcare program. Many services will take place online, including behavioral health interventions, with the aim of consolidating as much data as possible to build predictive profiles of individuals and facilitate the evaluation of impact investing deals.

Smart Pill Bottle.jpg

Interesting aside, I have two friends who had emergency room visits at Jefferson Hospital this summer and were “seen” by doctors on a screen with an in-room facilitator wielding a camera for examination purposes. This is in a major East Coast city served by numerous research hospitals. Philadelphia is not Alaska. Where is that data going? Where were those doctors anyway?

As these surveillance technologies move full steam ahead, it would be wise for progressive voices invested in the “healthcare for all” conversation to begin considering strategies to address the serious ethical concerns surrounding wearable technologies, tele-health / tele-therapy, and value-based patient healthcare contracting. If guardrails are not put in place that guarantee humane delivery of care without data profiling, the medical establishment may very well be hijacked by global fin-tech interests.

As someone who values the essence of the platform put forward by Alexandria Ocasio Cortez, I worry she and her supporters do not understand several key elements of her platform have already been identified as growth sectors for Pay for Success. If public education, healthcare, housing and justice reform are channeled by global financial interests into outsourced-based contracts tied to Internet of Things tracking, we will end up in an even worse place than we are now. So, if you care about progressive causes, please, please get up to speed on these technological developments. You can be sure ALEC already has, and remember that Alibaba (Sesame Credit) joined in December. It’s not too much of a stretch to imagine patient rating systems regulating healthcare access down the road if we’re not careful.

Ocasio Cortez

Senator Todd Young was the first person to respond to witness testimony during the hearing, and his line of questioning revealed he is a strong advocate of Thaler’s “nudge” strategies. The “nudge” is a key feature of “what works” “Moneyball” government that deploys austerity to push outsourcing and data-driven “solutions” that embrace digital platforms that will gather the data required prove “impact” and reap financial returns. See this related post from fellow researcher Carolyn Leith “A Close Reading of Moneyball for Government and Why You Should Be Worried.”

Young asked David Asch of Wharton’s Center for Innovative Health, what employers could learn from behavioral economists? He also posed several specific suggestions that would scale such programs within the federal government namely: embedding units charged with experimenting with behavioral economics into federal government programs; developing a clearinghouse of best practices; and bringing in behavioral scientists into the Congressional Budget Office.

Asch, a doctor employed by the Wharton Business School, runs UPenn’s Center for Health Care Innovation created in 2011 to test and implement “new strategies to reimagine health care delivery for dramatically better VALUE and patient OUTCOMES” (emphasis added). The 28,000-foot facility houses simulation learning labs and an accelerator where research on use of “smart” hospital systems, social media, and emerging technologies in healthcare is conducted. The accelerator aims to rapidly prototype and scale “high impact solutions,” read Pay for Success.

Besides the Acceleration Lab, the Center also contains the Nudge Unit, which according to their website is the world’s first behavioral design team embedded within a health system. The goal of the unit is to “steer medical decision making towards HIGHER VALUE and improved patient outcomes (emphasis added).” Sample healthcare nudges include embedded prompts in digital platforms (for screenings), changing default settings (to generic prescriptions), framing information provided to clinicians (not sure what this means), and framing financial incentives as a loss.

Healthcare nudge examples.jpg

This is longer than intended and hopefully provides some food for thought. This life datifying impact investing machine we are up against isn’t just coming for public education; it’s coming for ALL human service. We need to begin to understand the depth and breadth of this threat. I’m still mulling over a lot of this myself, and my knowledge base in healthcare is much shallower than my expertise in education. I’d love to hear what folks think in the comments or if you know of others writing on blockchain and IoT in medicine with a critical lens send me some links. Below are transcripts from West Virginia teacher Brandon Wolford about Go365 followed by the Senator Young / David Asch hearing exchange.

Go365 Transcript

Brandon Wolford, West Virginia Teacher: When I first began teaching in 2012 the insurance, in my opinion, was excellent, because I had worked for one year in Kentucky and I had known that the premiums were, although they were being paid five to seven thousand more than we were, they still had to pay much more for their insurance. So it balanced out. However, after the first year or two I was there, that was when they started coming after us with the tax on our insurance. First of all the premiums, we started to see slight increases for one, and another was they started to enforce this “Healthy Tomorrows” policy.

So, the next thing you know, we get a paper in the mail that says, you know, you have go to the doctor by such and such a date. It must be reported. Your blood glucose levels must be at a certain amount. Your waist size must be a certain amount, and if it is not, if you don’t meet all of these stipulations then you get a $500 penalty on your out-of-pocket deductible. So, luckily for me, I eat everything I want, but I was healthy. My wife on the other hand, who eats much better than I do, salads at every meal, has high cholesterol, so she gets that $500 slapped on her just like that.

Okay so, that was how they started out. In the mean time, we have been filling these out for a year or two, and they keep saying you know you have to go back each year and be checked. And then comes the event that awoke the sleeping giants. The PEIA Board, which is the Public Employee Insurance Agency that represents the state of West Virginia, they, um it’s just a board of four to five individuals that are appointed by the governor, they are not elected. They have no one they answer to; they just come up with these things on their own.

So they come to us and they say we’re raising your premiums. This was somewhere between November and December of last year. We’re raising your premiums. You’re going to need to be enrolled in a program called Go365, which means that you have to wear a fit bit, as well record all of your steps. You have to check in with them, and it included private questions like how much sexual activity do you perform, and is it vigorous? All of these things that they wanted us to report on our personal lives, and that was all included. In addition to that we had to report all of those things, and if we refused to wear that fit bit and record all of our steps, or if we didn’t make our steps, we were going to be charged an additional $25 per month.

So, when everyone sees this along with the increased premiums, then they’ve also introduced a couple more bills to go along with that, because the PEIA Board, they have the final say. Whatever they do, it’s not voted upon by the legislature. It’s basically just law, once they decide it. But in the meantime our legislature was presenting these bills. We were currently on a plan of sixty, uh excuse me, eighty/twenty we were paying out of pocket. Well, they had proposed a bill that would double that and make us pay sixty/forty.

So, they presented that along with charter school bills and a couple of other things that were just direct attacks on us. We had been going by a process of seniority for several years; and they also introduced a bill to eliminate seniority to where it was up to the superintendent whether or not you got to stay in your position. It was up to the principal and regardless if you were there thirty years or you were there for your first or your second year…they were trying to tell us you know, it’s just up to your principal to decide. The superintendent decides. They don’t want you to go, you’ve been there for thirty years and you have a masters degree plus forty-five hours, you’re gone. It’s up to them. Your seniority no longer matters. So those things combined with the insurance is actually what got things going in our state.

Excerpted Testimony Healthy Lifestyle Choices, Senate HELP Committee 10/19/17

Lamar Alexander: We’ll now have a round of five-minute questions. We’ll start with Senator Young.

Senator Todd Young: Thank you Chairman. I’m very excited about this hearing, because I know a number of our witnesses have discussed in their testimonies behavioral economics and behavioral decision-making. I think it’s really important that we as policy makers incorporate how people really behave. Not according to an economist per se, or according to other policy experts, but based on observed behaviors. Often times we behave in ways that we don’t intend to. It leads us to results that we don’t want to end up in.

So, Mr. Asch, I’ll start with you, with your expertise in this area. You’ve indicated behavioral economics is being used to help doctors and patients make better decisions and you see opportunities for employers to help Americans change their behaviors in ways they want from tobacco mitigation to losing weight to managing blood pressure and you indicate those changes are much less likely to come from typical premium-based financial incentives and much more likely to come from approaches that reflect the underlying psychology of how people make decisions, encouraged by frequent rewards, emotional engagement, contests, and social acceptance and so forth. And you said in your verbal testimony you haven’t seen much of this new knowledge applied effectively by employers, but there’s no reason why it cannot be. So, my question for you sir is what might employers learn from behavioral economists. Just in summary fashion.

David Asch, Wharton Center for Health Care Innovation: Sure. Thank you senator. I think I’ll start by saying there is a misunderstanding often about behavioral economics and health. Many people believe that if you use financial incentives to change behavior you’re engaged in behavioral economics, and I would say no, that’s just economics. It becomes behavioral economic when you use an understanding of our little psychological foibles and pitfalls to sort of supercharge the incentives and make them more potent so that you don’t have to use incentives that are so large.

So I think that there are a variety of approaches that come from behavioral economics that can be applied in employment setting and elsewhere. I mentioned one, which is capitalizing on the notion that losses looms larger than gains, might be a new way to structure financial incentives in the employment setting in ways that might make it more potent and more palatable and easier for all employees to participate in programs to advance their health. The delivery of incentives more frequently for example. Or using contests or using certain kinds of social norming where it’s acceptable to show people on leader boards in contests and get people engaged in fun for their health. All of these are possibilities.

Senator Todd Young: Thank you very much. You really need to study these different phenomena individually. I think to have a sense of the growing body of work that is behavioral economics. Right, so we need the increased awareness, and I guess the education of many employers about some of these tics we have. That seems to be part of the answer. In fact, Richard Thaler who just won the Nobel Prize for his ground-breaking work in this area indicated that we as policy makers ought to have on a regular basis not just lawyers and economists at the tables where we’re drafting legislation, but ought to have a behavioral scientist as well.

And the UK, they have the Behavioral Insights Team. The United States, our previous administration, had a similar sort of team that did a number of experiments to figure out how policies would actually impact an individual’s health and wellness and a number of other things. Some of the ideas that I think we might incorporate into the government context, and tell me if any of these sort pop for you; if you think they make sense?

We need to continue to have a unit or units embedded within government that do a lot of these experiments. We need to have a clearinghouse of best practices that other employers included might draw on. This doesn’t have to be governmental, but it could certainly be. We on Capitol Hill might actually consider aside from having a Congressional budget office than an official budget office, we might have an entity or at least some presence within the CBO or individuals that understand how people would actually respond to given proposals. Do any or all of those make sense to you?

David Asch: Thank you for your remarks. Yes, I think they all make sense. And one of the lessons that I guess I have repeatedly learned is that seeming subtle differences in design can make a huge difference in how effective a program can be and how it is perceived and that will ultimately care about the impact of these programs. So, I am very much in favor in the use of these programs, but in addition, greater study of these programs, because I think we need an investment in the science that will help all of us in delivering these activities, not just in healthcare, but in other parts of society.

Senator Young: That makes sense. I am out of time. Thank you.